The protesters' yearning for political change, embodied by the "Goddess of Democracy," and their anger about disruptive economic reform, expressed in nostalgia for Mao Zedong's rule, were on display in Tiananmen Square. 1Photo: Peter Charlesworth / LightRocket

Remembering Tiananmen Square’s Radical Reactionaries

June 4 (Bloomberg) -- During the spring of 1989, Chinese
activists gathered in the heart of Beijing to fight for
democracy. The tragic conclusion of the events around Tiananmen
Square, 24 years ago today, is well known.

What isn’t widely recognized, however, is that many of the
protesters were reactionaries who opposed the Western-style
economic reforms introduced a decade earlier.

In 1978, the regime, led by the recently installed leader
Deng Xiaoping, decided to pay farmers higher prices for the
crops purchased by the state and allow them to sell surplus
produce for even higher prices in newly opened free markets.

These incentives were intended to persuade farmers to grow
more food to satisfy the needs of a hungry and growing
population. Farmers responded with enthusiasm, increasing grain
production to 407 million metric tons in 1984 from 305 million
tons in 1978. Food production then leveled off, and as the
population continued to expand, growing demand drove up prices
on the open market.

At the same time, the regime was using money from foreign
loans and international investors to finance break-neck
industrialization, which raised prices for energy, natural
resources, and industrial and consumer goods. Prices rose 19
percent in 1988 and 28 percent in 1989, though Western
economists have estimated that the real rate was closer to 40
percent.

Food Prices

Higher food prices were good for rural farmers, who
improved their diets and increased their incomes for the first
time since the early 1950s. But inflation impoverished urban
residents living on fixed incomes and government salaries. For
the first time since the 1950s, urban workers’ living standards
declined. This was a shock because the urban minority in China
had long received benefits and privileges that were unavailable
to the huge rural majority.

In response, many urban residents sought to protect their
savings from inflation. For example, one elderly man in Beijing
bought seven refrigerators as a hedge against rising prices.
Unfortunately, this kind of hoarding led to shortages of many
goods (such as refrigerators) and boosted prices further. Other
urban workers tried to increase their incomes by taking on extra
work. The scholar Kathleen Hartford observed that many Chinese
“staved off the threat of inflation only by exhausting
themselves moonlighting, and young people felt they faced a
dead-end future of low pay and boring work -- if they could find
a job at all.”

As the inflation rate soared, support in the cities for
economic reform plummeted. A 1986 poll found that only 29
percent of urban residents thought that the economic changes
were beneficial; some urbanites even expressed nostalgia for Mao
Zedong’s rigid rule.

The reforms also encouraged widespread corruption because
the regime bought some food at a low, fixed price, while also
allowing farmers to sell a portion of their crop at higher,
market prices. Party officials began to take advantage of the
two-tier system by purchasing low-priced food, diverting it to
higher-price open markets and pocketing the difference.

At the same time, the regime’s refusal to raise salaries
forced many low-level bureaucrats to supplement their incomes by
demanding bribes. Officials in cities routinely asked for
kickbacks to install telephones, start electricity service,
deliver mail or provide medical care. A 1989 poll found that 84
percent of urban residents regarded corruption as the most
disturbing social problem.

Urban Movement

The angry mood of urban residents eventually found
expression in the streets. Students first gathered in Tiananmen
Square to mourn the death of Hu Yaobang, the Communist Party
chief who was deposed in 1987. That gathering evolved into a
celebration of the arrival in China of the reformist Soviet
leader Mikhail Gorbachev -- the movement was soon joined by
urban workers and embraced by residents in cities across China.

This unlikely alliance of students and workers was forged
by a shared dissatisfaction with inflation and corruption. By
calling for Deng’s ouster, the demonstrators demanded not only
an end to dictatorship, but also an end to capitalist economic
reform. They favored radical political change, but they also
harbored a deeply conservative view of economic change.

Deng wouldn’t budge. During the crisis, he described the
students as crybabies who wanted to return China to the
destructive politics of the Cultural Revolution. He urged his
fellow octogenarians in the party leadership to take military
action against the protesters and to “use a sharp knife to cut
through knotted hemp.” He rejected any concessions, saying, “We
do not fear spilling blood, and we do not fear the international
reaction.”

From April 6 until June 3, the party leadership debated and
the army balked at using force against the demonstrators. But
Deng eventually purged from the leadership those inclined to
make concessions, replaced recalcitrant army leaders with
stalwart supporters, and inserted fresh rural troops into the
capital. On the night of June 3 and the morning of June 4,
soldiers assaulted the unarmed demonstrators and killed between
1,000 and 2,600 civilians. “This was a test,” Deng said later.
“And we passed.”

(Robert Schaeffer, a professor of sociology at Kansas State
University, is the author of “Red Inc.: Dictatorship and the
Development of Capitalism in China, 1949 to the Present.” The
opinions expressed are his own.)

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